Why Saga turned PLC.

Private limited company are generally perceived smaller than public limited companies, and are relatively cheap to set up (Surridge, 2015, p20). Public limited company has been described as companies that are able to offer its shares to the public (Riley, 2015).

The main difference between the two limited companies, is that a PLC “shares can be traded on the Stock Exchange and can be bought by members of the general public. Shares in a private limited company are not available to the general public (Riley, 2015).

As Saga has converted to a PLC, their will be many advantages such as the opportunity to expand, since they can raise finance. The company will raise large sums of money from the sales of shares being listed on the stock exchange. Therefore, they can improve their services, expand and provide better facilities. It can drive higher customer satisfaction, so they can gain customers loyalty, customer will return to saga which will make sales volume go up. Another way Saga will raise finance is by IPO (Initial Public Offering) where the shares of the company float in the market for the first time. A listed company will also benefit from lower interest rates since larger companies are considered a lower risk by lenders. A private limited company has limitations on their sources of finance. Making it easier for Saga as PLC to grow now.

Saga’s first year as a PLC has been successful, according to Saga’s finance result, the group trading EBITDA has increased from £129.7m to £136.5m, which is an increased 5.2%. The trading profit has increased 1% as well, from £116.3m to £117.3m. Available operating cash flow has increased 0.9%, from £137.8m to £139.1m. Also, the shareholders have benefited from this conversion, since the basic earning per share has increased 121%, from 3.3p to 7.3p (Saga Group, 2015).

Saga has won 46 awards at the 2014 British travel awards. 7 Gold awards including ‘Best holiday company to Western Europe’. 8 Silver awards including ‘Best company for customer services’ and 5 bronze awards such as ‘Best luxury holiday company’ (Saga, 2014). All those awards were based on votes from the public. This clearly showed Saga has good customer satisfaction and strong customer base. Therefore, it can gain customer loyalty. “If you look after customers well, the profit will follow”, claimed Stuart Howard, the Chief Finance Officer (SAGA AGM film 2015-HD, 2015). Saga’s stuff is kept happy, working in good environment and a good atmosphere. They enjoy working with Saga, as one of the staff said “Saga is selling right for the customers, not what is right for the pocket” (SAGA AGM film 2015-HD, 2015). They keep customers on the first place and they think that makes Saga different. With that attitude would result in them providing high quality customer services. This can justify how Saga has 2 million customers of the Saga insurances. 70% of the company’s profit comes from their insurance services (Saga, 2014).

Saga has announced acquisition with Bennetts, The UK’s largest motorbike broker. Saga believes that it will benefit them in the future as Roger Ramsden, the CEO of Saga service, said “it’s a very exciting prospect for Saga.” (SAGA AGM film 2015-HD, 2015) Saga is now a larger company, they can now join the other company since they are a PLC. By this we can tell Saga’s conversion to a PLC was profitable as they can now takeover other companies with larger finance raised by selling shares to the public. However, “Bennetts will retain its own separate identity as the 85-year-old brand continues to drive forward with its aim to be the holistic provider of motorcycling services to Britain’s riders” (Bennetts, 2015).

Saga has raised a lot of capital since they are a PLC. “The company expects to raise about 550 million pounds ($924 million) in the sale in London” (Porter, 2014). However the company managed to raise $928m. With the proceeds, they have planned significant new investment and expansion. Therefore, they are planning get a new ship for providing better services. First ship to be delivered in summer 2019 (Saga, 2015). Carrying fewer than 1000 passengers and adding new features such as indoor and outdoor pool, spa, and a library. Also, around 15% of the accommodation will be for solo travelers. Saga is targeting more solo travelers as well. Saga’s prediction is that consumer cruise spending will increase by 43% by 2020.

Overall it was a successful year for Saga as a PLC. The profit margin is high, price for share has increased, more people interest to invest Saga. Gaining a lot of capital as the company has a lot of financial resources, and the acquisition with the other company, along with the new ship is in process. And that clearly show the expansion of Saga when they become a PLC. Lastly, Customers are satisfied and employees are enjoying their time working with Saga.

Segmentation is “to division of a market or buyers into certain categories according to their buying habits” which are definable, accessible, actionable, and profitable and have a growth potential (Riley and Greasby, 1999, p270).

There have 4 types of Segmentation: Geographic, Demographic, Behavioral and Psychographic. Geographic segmentation is the division of different regions and segmenting the market according to the location of consumers the company is trying to target. Demographic segmentation is segmenting the market according to different gender, age, household type, education and income levels. Psychographic segmentation is by customer’s lifestyle as well as values and beliefs. There are large target markets which fit psychographic segmentation, such as outdoor recreation, fitness, vegetarian. Behavioral segmentation separates a market by shopping and buying behaviors. Analyzing whether customers are online shoppers or do they

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